Congress have approved a $908 billion stimulus package days before Christmas that include enhanced unemployment benefits and aid to the small business and public sector.
The stimulus package that is supposed to be signed by the President consists of $228 billion in forgivable loan to small businesses. Moreover, it includes $180 billion unemployment benefits of $300 per week for about four and a half months.
In addition, the package includes $92 billion for child care and education and a further $45 billion for busses, airlines, Amtrack, and public transportation companies. The rest of the aid is for state and local government agencies
However, the bill does not include a second round of $1,200 stimulus check that was expected before Christmas.
Stimulus Package a Let Down for the People
People have been eagerly awaiting the second round of $1,200 aid funds to spend on the holiday season and pay their dues that have accumulated over the last few months.
A survey carried out by Franklin Templeton-Gallup found that 22 percent of people had stated that they would spend extra on vacation if the government gives out an extra $1,200 check before Christmas. The figure decreased to 16 percent without any stimulus check.
Around 37 percent had planned to spend less without the government stimulus check. And this is bad news for many businesses.
It has been more than seven months when the government had distributed the preliminary round of stimulus checks. A survey found that people had used the stimulus checks to pay for utilities and grocery items.
Some had also invested the cash to gain better health coverage within the shadow of the pandemic.
But this time around the two political factions disagreed on the COVID-19 support deal. Republicans don’t favor spending more than $500 billion on stimulus packages while the Democrats including President-elect Biden wants the government to spend a minimum of $2.2 trillion.
They agreed on a compromise that would fall short on the expectations of the people. President-elect Biden has stated that the Republicans might bend from their stance once President Trump is out of the picture.
What You Should Do While You Wait for Aid?
If you are facing financial problems due to the COVID-19 pandemic, you can get the additional $1,200 or more by taking a few steps.
Consider eliminating any subscription services that you don’t need. You can also prepare dinner at home and stop going out to save money. If you don’t want to sacrifice eat outs, look for sites that will tell you about restaurant coupons and dine-out deals.
Experts also advise that you can reduce debt expenses by consolidating the debt. Avoid taking more credit card or other loans during this unstable economic situation. You must keep your expenses within the income and free up as much cash as possible for savings.
Review your budget to find out if there is any expense that you can cut back on. This will allow you to leave some money to repay the existing debts. Moreover, it will allow you to benefit from any opportunity to reduce your financial burden.
Consider mowing down the insurance coverage rates. Many people have reduced the driving during the COVID pandemic. As a result, you should reconsider paying for enhanced accidental coverage.
Whether or not you are suffering from a financial problem, you should keep the money in the bank. Don’t panic and head to the ATM to withdraw cash. Your money will be completely safe in the bank due to federal protection. In the unfortunate event that your bank shuts down, your money will remain safe due to federal protections.
Financial Assistance through CARES Act
The Consumer Finance Association offers other advice to stay on top of your finance during the pandemic. If you are struggling to pay bills or other essential expenses, you can avail the economic assistance available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The CARES Act provides direct and fast financial assistance to American families. The Act was passed by Congress on March 2020. It allows small business owners and workers to continue to make important financial payments.
The $2 trillion stimulus package was passed overwhelmingly in the congress to reduce financial burden for Americans. The package is the biggest so far that has been passed to protect the public from the economic impacts of the COVID pandemic.
The CFPB encourages lenders and regulators to work with customers who are facing financial problems due to a loss of income. You should not hesitate from contacting your creditors and lenders if you are having difficulty in making the payments.
The CARES ACT allows homeowners to request a forbearance of their federally backed loans for up to 180 days. The duration can be extended to a further 180 days if required. Moreover, private mortgage providers may also offer similar incentives.
In addition, the CARES ACT also offers some incentives to students that hold federal student loans. AS per the legislation, the payments on federal student loans had been suspended till the end of September 2020. You can contact your student loan provider to figure out your options for easing the debt payment burden.
The Bottom Line
The stimulus package passed by the Congress was half the size of an expected $1.8 trillion package that Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi were discussing before the election. It prioritized unemployment assistance, nutrition programs, business loans and public care services. These were deemed to be of a higher importance as compared to the stimulus checks that many Americans were expecting before Christmas.
Lawmakers had described the bill as a four month emergency relief package for Americans facing financial problems due to the coronavirus pandemic. But many say that there is a need for an interim package for consumers.
US Senator Mitt Romney had said that the bill is not a stimulus package but a relief bill of half the amount. He says the only time to borrow money is during a crisis. This is a crisis that the nation is facing today, and they require more.